January 29, 2009

 

Argentina's farmers are considering holding a protest to demand more action from the government to help sustain the sector during the worst drought in 50 years, a farm leader said late Tuesday (Jan 27).

 

Farmers could launch a protest in "15 days, a month, or maybe never," Eduardo Buzzi, head the Argentine Agrarian Federation, said in an interview on the C5N television news network. "We hope we don't have a new protest."

 

Buzzi and other farmer leaders last year led a four-month protest against a government hike in soy export taxes, what ultimately led to an overturn of the increase.

 

The decision on a new protest hinges on whether the government meets farmers' requests for more measures to help improve sagging profits in the face of crop losses from the drought, low commodity prices and surging costs for fertilisers and other inputs.

On Monday (Jan 26), Argentine President Cristina Fernandez de Kirchner declared an "agricultural emergency" and said farmers and ranchers hit by the drought will be able to defer personal income and other tax payments for up to a year. The government also will temporarily stop charging farmers for the right to transport grains and oilseeds.

 

Buzzi had slammed the measures, calling it a 'joke' and said more efforts are needed, including the injection of fresh funds and the easing of export restrictions.

 

He said the drought has killed 600,000 heads of cattle and cost farmers about US$5 billion in lost grain sales because of less production of corn, wheat and soy.

 

"We are going to lose about 20 million tonnes, but this could be more," he said, without specifying which crops.

 

Argentina is the world's third-largest exporter of corn and soy and the leading exporter of soymeal and soyoil.

 

So far this year, many parts of the farm belt have seen the lowest precipitation in 47 years, with a reduction of between 40-60 percent from historic averages, according to the Buenos Aires Cereals Exchange.

 

The exchange now expects the drought to leave 2008-09 soy production at between 34.5 million to 38.2 million tonnes, or 17-percent to 25-percent less than the 2007-08 season's 46.2 million tonnes.

 

Corn output over the same period is seen declining 33-40 percent to just 12.3 million to 13.7 million tonnes from 20.5 million tonnes in 2007-08, it said.

 

Sunflower seed production is expected to fall between 20-32 percent from the 4.65 million tonnes grown last season, according to the exchange.